execution
copy


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of September 24, 2018, between OncBioMune Pharmaceuticals,
Inc., a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements
of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Rule 506(b) thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities
of the Company as more fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


 


ARTICLE
I.

DEFINITIONS


 


1.1
Definitions. In addition to the words and terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms have the meanings set forth in this Section 1.1:


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j)


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1(a).


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities to be issued and sold, in each case, have been satisfied or waived,
but in no event later than the second Trading Day following the date hereof.


 




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“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.


 


“Company
Counsel” means LLP.


 


“Escrow
Agent” means Nason, Yeager, Gerson, White & Lioce, P.A.


 


“Escrow
Agreement” means the escrow agreement, in the form of Exhibit F.


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company,
in an aggregate amount not to exceed 10% of shares of Common Stock outstanding at any given time, the pursuant to any stock or
option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of
the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities
upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities issuable pursuant to
existing agreements, exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the
date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock dividends, stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) securities
issued pursuant to any purchase money equipment loan or capital leasing arrangement approved by the Collateral Agent under the
Security Agreement, purchasing agent or debt financing from a commercial bank or similar financial institution, (e) shares of
Common Stock in an underwritten public offering in an amount in excess of $3.0 million if the Company utilizes at least 50% of
the proceeds to prepay the Notes in accordance with Section 2(e) of the Notes or securities.


 




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“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Guaranty
Agreement” means the amended and restated guaranty agreement for the Notes executed by each Subsidiary in the form attached
hereto as Exhibit C.


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).


 


“Intellectual
Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto, and all U.S. and foreign patents, patent applications,
and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, brand names, certification marks, trade dress, logos, trade names, domain names, assumed
names and corporate names, together with all colorable imitations thereof, and including all goodwill associated therewith, and
all applications, registrations, and renewals in connection therewith, (c) all copyrights, and all applications, registrations,
and renewals in connection therewith, (d) all trade secrets under applicable state laws and the common law and know-how (including
formulas, techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information,
and business and marketing plans and proposals), (e) all computer software (including source code, object code, diagrams, data
and related documentation), and (f) all copies and tangible embodiments of the foregoing (in whatever form or medium).


 


“Intellectual
Property Agreement” has the meaning set forth in Section 3.1(p).


 


“Lead
Investor” means Cavalry Fund I LP.


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


“Notes”
mean the 10% Original Issue Discount Senior Secured Convertible Promissory Notes issued to the Purchasers, in the form of Exhibit
A attached hereto, which bear interest at the rate of 5% per annum, shall be secured pursuant to a Security Agreement and
shall be senior as to all Indebtedness except for any notes issued pursuant to any purchase money equipment loan or capital leasing
arrangement approved by the Collateral Agent under the Security Agreement and shall be pari passu to all indebtedness under the
10% Original Issue Discount Senior Convertible Notes due March 26, 2018 issued by the Company on July 26, 2017, the 10% Original
Issue Discount Senior Convertible Notes due September 29, 2018 issued by the Company on January 29, 2018 and the 10% Original
Issue Discount Senior Convertible Notes due November 13, 2018 issued by the Company on March 13, 2018.


 




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“Note
Conversion Price” means $0.02 per share, subject to adjustment as provided in the Note.


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.11(a).


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Pledge
Agreement” means the amended and restated pledge agreement, in the form of Exhibit D, pledging the outstanding common
stock and other equity instruments of each Subsidiary


 


“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.11(a).


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.11(d).


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.


 


“Regulation
FD” means Regulation FD promulgated by the SEC pursuant to the Exchange Act, as such Regulation may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect
as such Regulation.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Shares issuable upon conversion of the Notes and Warrant Shares
issuable upon exercise in full of all Warrants ignoring any exercise limits set forth therein.


 


“Rule
144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect
as such Rule.


 


“SEC”
means the United States Securities and Exchange Commission.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities”
means the Notes, the Shares, the Warrants and the Warrant Shares.


 




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“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Security
Agreement” means the amended and restated security agreement, in the form of Exhibit E, providing the Purchasers
with a first lien on all of the assets of the Company other than as provided in this Agreement.


 


“Shares”
means the Common Stock issuable upon conversion of the Notes.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the


Exchange
Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.11(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.11(a).


 


“Subsidiary”
means with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of which (A) more than 50% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or
other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital
or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture
or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control
of the Company.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, the OTCQB, the OTCQX, or the OTC Pink Marketplace (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Security Agreement, the Pledge Agreement, the Guaranty Agreement,
the Escrow Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 




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“Transfer
Agent” means West Coast Stock Transfer, Inc., 721 N. Vulcan Ave, Suite 205. Encinitas, CA 92024, and any successor transfer
agent of the Company.


 


“Underlying
Shares” means the Shares and the Warrant Shares.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if prices for the Common Stock are
then reported on the OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the volume weighted average price of the Common Stock on the first such facility (or a
similar organization or agency succeeding to its functions of reporting prices), or (c) in all other cases, the fair market value
of a share of Common Stock as determined by the Board of Directors of the Company.


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five years from such initial
exercise date, in the form of Exhibit B attached hereto.


 


“Warrant
Exercise Price” means $0.04 per share.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants at the Warrant Exercise Price.


 


ARTICLE
II.

PURCHASE AND SALE


 


2.1       Closing.
(a) On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase an aggregate of (i) $1,361,111.11 face value of 10% original issue discount Notes for a total purchase price
of $1,225,000, and (ii) 51,041,667 Warrants, which is equal to 75% of the Shares issuable upon conversion of the purchased Notes,
for no additional consideration. Each Purchaser shall deliver to the Escrow Agent, via wire transfer immediately available funds
equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and
the Company shall deliver to each Purchaser its respective Note and a Warrant as determined pursuant to Section 2.2(a), and the
Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or
such other location as the parties shall mutually agree. If a Closing is not held on or before September 24, 2018, the Escrow
Agent will return all Subscription Amounts, if any such amounts have been funded, without interest or deduction to each prospective
Purchaser.


 




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2.2 Deliveries.


 


(a)
On or prior to Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:


 


(i)
this Agreement duly executed by the Company;


 


(ii)
RESERVED;


 


(iii)
a Note, convertible at the Note Conversion Price, registered in the name of such Purchaser;


 


(iv)
a Warrant, exercisable at the Warrant Exercise Price, registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to 75% of such Purchaser’s Shares, subject to adjustment as described therein (such
Warrant certificate may be delivered within two Trading Days of the Closing Date);


 


(v)
a Security Agreement providing the Purchasers with a lien on all of the assets of the Company;


 


(vi)
a Guaranty Agreement executed by the Company’s Subsidiary OncBioMune, Inc.;


 


(vii)
a Pledge Agreement pledging the Company’s outstanding common stock and other equity instruments of and the
Company’s subsidiary OncBioMune, Inc.;


 


(viii)
an executed Securities Purchase Agreement (the “Redemption Agreement”) between the Company and Puritan Partners
LLC (the “Prior Investor”) in the form attached as Schedule A evidencing an agreement to redeem all of the
securities issued to the Prior Investor under the June 2, 2017and July 26, 2017 and the January 26, 2018 and March 13, 2018
Securities Purchase Agreements, Promissory Notes and Warrants and terminate of all the Prior Investor’s rights under
these instruments; and


 


(ix)
the Escrow Agreement duly executed by the Company.


 


(b)
On or prior to the Closing Date each Purchaser shall deliver or cause to be delivered to the Company the
following:


 


(i)
this Agreement duly executed by such Purchaser;


 




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(ii)
the Escrow Agreement duly executed by such Purchaser;


 


(iii)
to the Company, such Purchaser’s Subscription Amount by wire transfer to the Escrow Agent; and


 


(iv)
the Lead Investor shall deliver the Security Agreement and Pledge Agreement as collateral agent for the benefit of the
Purchasers.


 


2.3 Closing
Conditions.


 


(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being
met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers
contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);


 


(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall
have been performed; and


 


(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


 


(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions
being met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the
Company contained herein (unless as of a specific date therein);


 


(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have
been performed;


 


(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


 


(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof;


 


(v)
from the date hereof to the Closing Date trading in the Common Stock shall not have been suspended by the SEC or the
Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it
impracticable or inadvisable to purchase the Securities at the Closing;


 




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(vi)
the Escrow Agent receiving a minimum of $1,150,000 from Purchasers in accordance with this Agreement and the Escrow
Agreement;


 


(vii)
The execution of a waiver letter from the holder of the Existing Liens (the “Waiver Letter”) in the form
attached hereto as Exhibit G.


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES


 


3.1 Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser
as of the date hereof:


 


(a) Subsidiaries.
Subject to the execution and consummation of the transactions contemplated by the Redemption Agreement, and the liens (the
Existing Liens, set forth on Schedule 3.1(a), (the “Existing Liens”) all of the direct and indirect
subsidiaries of the Company are set forth in the SEC Reports. Subject to the execution and consummation of the transactions
contemplated by the Redemption Agreement, and the Existing Liens, the Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the
Subsidiaries or any of them in the Transaction Documents shall be disregarded. The Subsidiaries are listed on Schedule
3.1(a).


 


(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to
result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting
or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 




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(c) Authorization;
Enforcement. Subject to the execution and consummation of the transactions contemplated by the Redemption Agreement, and
the Existing Liens, the Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction
Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of
Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required
Approvals. Subject to obtaining the Required Approvals, this Agreement and each other Transaction Document to which it is a
party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 


(d) No
Conflicts. Except as set forth in Schedule 3.1(d), the execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the
consummation by it of the transactions contemplated hereby and thereby do not and will not (i) subject to the Required
Approvals, conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) subject to the Subject to the execution and
consummation of the transactions contemplated by the Redemption Agreement, and execution of the Waiver Letter conflict with,
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.


 




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(e) Filings,
Consents and Approvals. Except as set forth on Schedule 3.1(e), the Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this
Agreement, (ii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading
thereon in the time and manner required thereby, (iii) filings necessary to perfect the Liens in favor of the Purchasers
under the Security Agreement, (iv) such filings as are required to be made under applicable state securities laws and (v) the
approval of the Company’s shareholders approving an amendment to the Company’s certificate of incorporation to
increase in the Company’s Common Stock and filing of such amendment with the Secretary of State of the State of Nevada,
(collectively, (vii) the consummation of the transactions contemplated by the Redemption Agreement (viii), the execution of
the Waiver Letter ( the “Required Approvals”).


 


(f) Issuance
of the Securities. Subject to the Company’s shareholders approving an amendment to the Company’s certificate
of incorporation to increase in the Company’s Common Stock and filing of such amendment with the Secretary of State of
the State of Nevada, the Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by
the Company. Subject to the Company’s shareholders approving an amendment to the Company’s Articles of
Incorporation to increase in the Company’s Common Stock and filing of such amendment with the Secretary of State of the
State of Nevada, the Shares, when issued upon conversion of the Notes, and the Warrant Shares, when issued in accordance with
the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. Within two trading days after the Company files an amendment of its Articles of Incorporation to increase the number
of shares of common stock it is authorized to issue with the Secretary of State of the State of Nevada, the Company shall
reserve from its duly authorized capital stock a number of shares of Common Stock issuable pursuant to the Notes and the
Warrants equal to the amount set forth in Section 4.9.


 




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(g) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its
most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock awards
under the Company’s equity incentive plans, the issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. Subject to the execution and
consummation of the transactions contemplated by the Redemption Agreement, and execution of the Waiver Letter no Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as set forth in the SEC Reports, as a result of the purchase and sale of
the Securities or as set forth on Schedule 2.3(b), there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital
stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. Other
than subject to the execution and consummation of the transactions contemplated by the Redemption Agreement, there are no
outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. Subject to the Company’s shareholders
approving an amendment to the Company’s certificate of incorporation to increase in the Company’s Common Stock
and the filing of such amendment with the Secretary of State of the State of Nevada, to further approval or authorization of
any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no
stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to
which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.


 


(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.


 




    	 	12	 



     


    

 


(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof,
(i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with
the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company equity incentive plans. The Company does not have pending before the SEC any
request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement
or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is made.


 


(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation, inquiry or other similar proceeding of
any federal or state government unit pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the issuance of the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. The Company has no reason to believe that an Action will be
filed against it in the future. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act, and the Company has no reason to believe it will do so in the
future.


 




    	 	13	 



     


    

 


(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or
such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company,
no effort is underway to unionize or organize the employees of the Company or any Subsidiary. To the knowledge of the
Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment
and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. There is no workmen’s compensation liability matter, employment-related
charge, complaint, grievance, investigation, inquiry or obligation of any kind pending, or to the Company’s knowledge,
threatened, relating to an alleged violation or breach by the Company or its Subsidiaries of any law, regulation or contract
that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(l) Compliance.
Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental
authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not
have or reasonably be expected to result in a Material Adverse Effect.


 




    	 	14	 



     


    

 


(m)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and
foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or
demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued,
entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or
other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in
compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse
Effect.


 


(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


 


(o) Title
to Assets. Subject to the disclosure set forth on Schedule 3.1(o), the Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and marketable title in all personal property
owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens,
except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and the Subsidiaries, (ii) Liens for the payment of federal, state or
other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is
neither delinquent nor subject to penalties, and (iii) the Lien pertaining to the Regions Bank Loan. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.


 




    	 	15	 



     


    

 


(p) Intellectual
Property.


 


(i)
Subject to the Existing Liens, the Company owns or possesses or has the right to use pursuant to a valid and enforceable
written license, sublicense, agreement, or permission all Intellectual Property necessary for the operation of the business
of the Company as presently conducted. The Company has provided the Purchaser a true and complete copy of each such written
license, sublicense, agreement or permission.


 


(ii)
The Intellectual Property does not interfere with, infringe upon, misappropriate, or otherwise come into conflict with,
any Intellectual Property rights of third parties, and the Company has no Knowledge that facts exist which indicate a
likelihood of the foregoing. The Company has not received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or conflict (including any claim that the Company must license or refrain
from using any Intellectual Property rights of any third party). To the Knowledge of the Company, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into conflict with, any Intellectual Property rights of
the Company.


 


(iii)
The Company has no pending patent applications or applications for registration that either entity has made with respect to
any Intellectual Property. Schedule 3.1(p) identifies each license, sublicense, agreement, or other permission that
the Company has granted to any third party with respect to any of such Intellectual Property (together with any exceptions).
The Company has delivered to the Purchaser correct and complete copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date) (“Intellectual Property Agreements”). Schedule 3.1(p) also identifies
each registered and unregistered trademark, service mark, trade name, corporate name, URLs or Internet domain name used by
the Company in connection with its business and which is not licensed from a third party. With respect to each item of
Intellectual Property required to be identified in Schedule 3.1(p):


 


		(A)	The
                                         Company owns and possesses all right, title, and interest in and to the item, free and
                                         clear of any Lien, license, or other restriction or limitation regarding use or disclosure;
	 	 	 
		(B)	The
                                         item is not subject to any outstanding injunction, judgment, order, decree, ruling, or
                                         charge;
	 	 	 
		(C)	No
                                         Action, claim, or demand is pending or, to the knowledge of the Company, is threatened
                                         that challenges the legality, validity, enforceability, use, or ownership by the Company;
                                         and
	 	 	 
		(D)	The
                                         Company has not agreed to indemnify any Person for or against any interference, infringement,
                                         misappropriation, or other conflict with respect to the item.



 




    	 	16	 



     


    

 


(iv) Schedule
3.1(p)(iv) identifies each item of Intellectual Property that any third party owns and that the Company uses pursuant to
license, sublicense, agreement, or permission, excluding off-the-shelf software purchased or licensed by the Company. The
Company has delivered to the Purchaser correct and complete copies of all such licenses, sublicenses, agreements, and
permissions (each as amended to date) (each, a “Licensed Intellectual Property Agreement”). With respect to each
Licensed Intellectual Property Agreement:


 


		(A)	The
                                         Licensed Intellectual Property Agreement is legal, valid, binding, enforceable, and in
                                         full force and effect;
	 	 	 
		(B)	No
                                         party to the Licensed Intellectual Property Agreement is in breach or default, and no
                                         event has occurred that with notice or lapse of time would constitute a breach or default
                                         or permit termination, modification, or acceleration thereunder, which as to any such
                                         breach, default or event could have a Material Adverse Effect on the Company;
	 	 	 
		(C)	No
                                         party to such Licensed Intellectual Property Agreement has repudiated any provision thereof;
	 	 	 
		(D)	Except
                                         as set forth in such Licensed Intellectual Property Agreement, the Company has not received
                                         written or verbal notice or otherwise has Knowledge that the underlying item of Intellectual
                                         Property is subject to any outstanding injunction, judgment, order, decree, ruling, or
                                         charge; and
	 	 	 
		(E)	Except
                                         as set forth on Schedule 3.1(p)(iv), the Company has not granted any sublicense
                                         or similar right with respect to the license, sublicense, agreement, or permission.



 


(v)
The Company has complied with and is presently in compliance with all foreign, federal, state, local, governmental
(including, but not limited to, the Federal Trade Commission and State Attorneys General), administrative, or regulatory
laws, regulations, guidelines, and rules applicable to any personal identifiable information.


 


(vi)
Each Person who participated in the creation, conception, invention or development of the Intellectual Property currently
used in the business of the Company (each, a “Developer”) which is not licensed from third parties has executed
one or more agreements containing industry standard confidentiality, work for hire and assignment provisions, whereby the
Developer has assigned to the Company all copyrights, patent rights, Intellectual Property rights and other rights in the
Intellectual Property, including all rights in the Intellectual Property that existed prior to the assignment of rights by
such Person to the Company. The Company has provided to the Purchaser copies of any such agreements and assignments from each
such Developer (collectively, the “Developer Agreements”).


 




    	17



    	 



    

 





(vii)
Each Developer has signed a perpetual non-disclosure agreement with the Company. The Company has provided, or will
provide prior to Closing, to the Purchaser copies any such non-disclosure agreements from each such Person, if
any.


 


(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are
engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.


 


(r) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a
party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including
stock award agreements under any equity incentive plan of the Company.


 


(s) Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in the SEC Reports, the Company and the Subsidiaries are in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of
the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls as set forth in the SEC
Reports. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the
internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries
that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of
the Company and its Subsidiaries.


 




    	 	18	 



     


    

 


(t) Certain
Fees. Other than as set forth on Schedule 3.1(t), no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by
the Transaction Documents.


 


(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of
1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment
company” subject to registration under the Investment Company Act of 1940, as amended.


 


(v) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary except as disclosed on Schedule 3.1(v).


 


(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is
contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established
clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such electronic transfer.


 


(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’
ownership of the Securities.


 




    	 	19	 



     


    

 


(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents
or counsel with any information that it believes constitutes or might constitute material, non-public information which is
not otherwise disclosed in the SEC Reports. The Company understands and confirms that the Purchasers will rely on the
foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by
the Company during the twelve months preceding the date of this Agreement do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that
no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 3.2 hereof.


 


(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any
applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or
designated.


 


(aa) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by
the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and
projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts
are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge
of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports and Schedule
3.1(aa) set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $10,000 (other than
trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in
excess of $10,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth on Schedule
3.1(aa), neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 




    	 	20	 



     


    

 


(bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably
adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.


 


(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or
any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated any provision of FCPA.


 


(dd) Accountants.
The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such
accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) has expressed its opinion
with respect to the financial statements included in the Company’s Annual Report for the fiscal year ending December
31, 2017.


 




    	 	21	 



     


    

 


(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.


 


(ff)
Acknowledgement Regarding Purchaser’s Trading Activity. Notwithstanding
anything in this Agreement or elsewhere to the contrary (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged
by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if
any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.


 


(gg) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the Company.


 


(hh) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the Notes, the Shares upon conversion thereof,
the Warrants or the Warrant Shares issuable upon exercise thereof by the Company to the Purchasers as contemplated
hereby


 




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(ii) No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only
to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act.


 


(jj) No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b)
under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the
Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term
is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale, nor any
Person, including a placement agent, who will receive a commission or fees for soliciting purchasers (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to
determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures
provided thereunder.


 


(kk) Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any
Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time,
reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is
aware.


 


(ll) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(mm) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.


 


(nn) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management
or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.


 




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(oo) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.


 


3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):


 


(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this
Agreement and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by
all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such
Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by
such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.


 


(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or
indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell the Securities in compliance with
applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of
its business. Such Purchaser understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and is acquiring such Securities as principal for
its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the
Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s
right to sell such Securities in compliance with applicable federal and state securities laws).


 




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(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an accredited
investor within the meaning of Rule 501 under the Securities Act. No Purchaser is subject to any of the “Bad
Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).


 


(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear
the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such
investment.


 


(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded, subject to Regulation FD, (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that
neither the Company nor anyone else has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired.


 


(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has
not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly
executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of
the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing
the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than
to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its
officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing
of, available shares to borrow in order to effect Short Sales or similar transactions in the future.


 




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The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations
and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transaction contemplated hereby.


 


ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1 Removal
of Legends.


 


(a)
The Shares, the Warrants and Warrant Shares may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Warrants or Warrant Shares other than pursuant to an effective registration statement or Rule
144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the
Company at its sole cost may require the transferor thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory
to the Company, to the effect that such transfer does not require registration of such transferred Restricted Warrant under
the Securities Act.


 


(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares, the
Warrants or Warrant Shares in the following form:


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 




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The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Shares or Warrant Shares to a financial institution
that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by
the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or
secured Shares or Warrant Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval
of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party of Shares and Warrant Shares may reasonably request
in connection with a pledge or transfer of the Shares or Warrant Shares.


 


(c)
Certificates evidencing the Shares and the Warrant Shares shall not contain any legend (including the legend set forth in
Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the
Securities Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144, (iii) if such Shares or
Warrant Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such Shares or Warrant Shares and without volume or manner-of-sale
restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including Section
4(a)(1), judicial interpretations and pronouncements issued by the staff of the SEC) (the “Effective Date”). The
Company shall, at its expense, cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective
Date if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any portion of a Note is
converted or a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the
Shares or the Warrant Shares, or if such Shares or Warrant Shares may be sold under Rule 144 and the Company is then in
compliance with the current public information required under Rule 144, or if the Shares or Warrant Shares may be sold under
Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule
144 as to such Shares or Warrant Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise
required under applicable requirements of the Securities Act (including Section 4(a)(1), judicial interpretations and
pronouncements issued by the staff of the SEC) then such Shares or Warrant Shares shall be issued or reissued free of all
legends. The Company agrees that following the effective date of any registration statement or at such time as such legend is
no longer required under this Section 4.1(c), it will, no later than two Trading Days following the delivery by a
Purchaser to the Company or the Transfer Agent of a certificate representing restricted Shares or Warrant Shares, as
applicable, issued with a restrictive legend (such second Trading Day, the “Legend Removal Date”), deliver or
cause to be delivered to such Purchaser a certificate representing such Shares or Warrant Shares that is free from all
restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section 4.1. Certificates for Shares or Warrant Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of
the Purchaser’s prime broker with the Depository Trust Company system as directed by such Purchaser.


 




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(d)
In addition to such Purchaser’s other available remedies, (i) the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, for each $1,000 of per share purchase price and exercise price, respectively, of
Shares and Warrant Shares (based on the VWAP of the Common Stock on the date such Shares and/or Warrant Shares are submitted
to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day for
each Trading Day after the Legend Removal Date (increasing to $20 per Trading Day after the 5th Trading Day) until such
certificate is delivered without a legend. In no event shall liquidated damages for any one transaction exceed $1,000.00 for
the first ten Trading Days. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and
such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, and (ii) if after the Legend Removal Date such Purchaser purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of
all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or
any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any
restrictive legend, then, the Company shall pay to such Purchaser, in cash, an amount equal to the excess of such
Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the
“Buy-In Price”) over the product of (A) such number of Shares or Warrant
Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest
closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by
such Purchaser to the Company of the applicable Shares or Warrant Shares (as the case may be) and ending on the date of such
delivery and payment under this Section 4.1(d).


 


(e)
In the event a Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required
to deliver such unlegended shares, (i) it shall pay all fees and expenses associated with or required by the legend removal and/or
transfer including but not limited to legal fees, transfer agent fees and overnight delivery charges and taxes, if any, imposed
by any applicable government upon the issuance of Common Stock,; and (ii) the Company may not refuse to deliver unlegended shares
based on any claim that such Purchaser or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s
obligations under the Transaction Documents, or for any other reason, unless, an injunction or temporary restraining order from
a court, on notice, restraining and or enjoining delivery of such unlegended shares shall have been sought and obtained by the
Company and the Company has posted a surety bond for the benefit of such Purchaser in the amount of the greater of (i) 15% of
the amount of the aggregate purchase price of the Shares and Warrant Shares which is subject to the injunction or temporary restraining
order, or (ii) the VWAP of the Common Stock on the trading day before the issue date of the injunction multiplied by the number
of unlegended shares to be subject to the injunction, which bond shall remain in effect until the completion of the litigation
of the dispute and the proceeds of which shall be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s
favor.


 




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4.2 Furnishing
of Information.


 


(a)
Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to
be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the
reporting requirements of the Exchange Act.


 


(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time on the
earlier to occur that the Warrants are not outstanding, terminated or that all of the Warrant Shares (assuming cashless
exercise) may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) for a period of more than 30 consecutive days or (ii) has ever been an issuer
described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) for a period of more than 30 consecutive days (a “Public Information Failure”) then, in
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Shares and/or
Warrant Shares, an amount in cash equal to two percent (2.0%) of the aggregate Note Conversion Price of such
Purchaser’s Note(s) and/or Warrant Exercise Price of such Purchaser’s Warrants on the day of a Public Information
Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until
the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no
longer required for the Purchasers to transfer the Shares and/or Warrant Shares pursuant to Rule 144. In no event shall the
amount paid under this section exceed 6.0% of the aggregate Note Conversion Price. The payments to which a Purchaser shall be
entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.” Public
Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public
Information Failure Payments are incurred and (ii) the second (2rd) Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue
actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief.


 




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4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2(a)(1) of the Securities Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent
transaction.


 


4.4 Securities
Laws Disclosure; Publicity. The Company shall, by 5:30 p.m. (New York City time) on the second trading date following
the date of execution hereof, file a Current Report on Form 8-K disclosing the material terms of this Agreement, including
the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act. From and after the
filing of the Form 8-K as provided in the preceding sentence, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its
Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective upon the issuance of such Form 8-K, the Company
acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral,
between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates
on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and
each Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior
consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld
or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the SEC or any
regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by
federal securities law in connection with the filing of final Transaction Documents with the SEC and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b).


 


4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the
Company and the Purchasers.


 




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4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it,
nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such
Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information
confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such
Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided
pursuant to any Transaction Document or any other communications made by the Company, or information provided, to the
Purchaser constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the
Company shall simultaneously file such notice or other material information with the SEC pursuant to a Current Report on Form
8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company. In addition to any other remedies provided by this Agreement or other Transaction
Documents, if the Company provides any material, non-public information to the Purchasers without their prior written
consent, and it fails to immediately (no later than that Business Day) file a Form 8-K disclosing this material, non-public
information, it shall pay the Purchasers as partial liquidated damages and not as a penalty a sum equal to $1,000 per day for
each $100,000 of each Purchaser’s Subscription Amount beginning with the day the information is disclosed and ending
and including the day the Form 8-K disclosing this information is filed.


 


4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for the redemption or
cancellation of the securities reflected on Schedule 4.7 and for working capital purposes, and shall not use such
proceeds: (a) for the satisfaction of any other portion of the Company’s debt (other than payment of trade payables in
the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or
Common Stock Equivalents, (c) for the settlement of any outstanding litigation, (d) in violation of FCPA or OFAC regulations,
or to lend money, give credit, or make advances to any officers, directors, employees or affiliates of the
Company.


 




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4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling
persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation (including local counsel, if retained) that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents, (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any
violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
constitutes fraud, gross negligence, willful misconduct or malfeasance) or (c) any untrue or alleged untrue statement of a
material fact contained in any registration statement, any prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading. If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party
shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel (in addition to local counsel, if retained).
The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser
Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents. The Purchaser Parties shall have the right to settle any action against any
of them by the payment of money provided that they cannot agree to any equitable relief and the Company, its officers,
directors and Affiliates receive unconditional releases in customary form. The indemnification required by this Section 4.8
shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant
to law.


 




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4.9
Reservation of Common Stock. As of the date hereof, the Company does not have sufficient authorized but unissued Common Stock
to reserve and keep available at all times in favor of the Purchasers on a pro rata basis based on each Purchaser’s
Subscription Amount, free of preemptive rights, a number of shares of Common Stock equal to five times the number of shares
of Common Stock issuable upon conversion of the Notes and exercise of the Warrants (subject to adjustment for stock splits
and dividends, combinations and similar events) (the “Reserve Ratio”). The Company agrees to file within 90 days
of the date hereof a proxy statement or Information Statement (the “Proxy Statement”) and take all other
necessary corporate actions in order to obtain shareholder approval as expeditiously as possible to increased its authorized
shares of Common Stock to 1,250,000,000 or effect a reverse split of the Common Stock to allow for reserving the Reserve
Ratio. Dr. Jonathan Head shall have agreed to vote all of his shares in favor of such corporate action.


 


In
addition to any other remedies provided by this Agreement or other Transaction Documents, if the Company at any time fails to
meet this reservation of Common Stock requirement within 45 days after written notice from the Holder, it shall pay the Purchasers
as partial liquidated damages and not as a penalty a sum equal to $500 per day for each $100,000 of each Purchaser’s Subscription
Amount and it shall sell to the Lead Investor for $100 a series of preferred stock which contains the power to vote a number of
votes equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s shareholders
(with the power to take action by written consent in lieu of a shareholders meeting) for the sole purpose of amending the Company’s
Articles of Incorporation to increase its authorized Common Stock. The Company shall not enter into any agreement or file any
amendment to its Articles of Incorporation (including the filing of a Certificate of Designation) which conflicts with this Section
4.9 while the Notes and Warrants remain outstanding.


 


4.10 Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or
quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and
Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on
any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such
other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading
Market as promptly as possible. The Company will then take all action necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.


 




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4.11 Participation
in Future Financing.


 


(a)
From the date hereof until the date that is the twelve (12) month anniversary of the Closing Date , upon any issuance by the
Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a
combination of units hereof in a transaction exempt from registration under the Securities Act (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to
75% of the Subsequent Financing; provided, that the balance of the investors shall be satisfactory to the Purchasers (the
“Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. At
least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a
written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such
Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing
Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing
Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing
Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom
such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as
an attachment.


 


(b)
Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not
later than 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received
the Pre-Notice that such Purchaser is willing to participate in the Subsequent Financing, the amount of such
Purchaser’s participation, and representing and warranting that such Purchaser has such funds ready, willing, and
available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice
from a Purchaser as of such fifth (5th) Trading Day, such Purchaser shall be deemed to have notified the Company
that it does not elect to participate.


 


(c)
If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the
Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause
their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the
Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.


 


(d)
If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the
Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the
aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of
Securities purchased on the Closing Date by a Purchaser participating under this Section 4.11 and (y) the sum of the
aggregate Subscription Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section
4.11.


 




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(e)
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the
right of participation set forth above in this Section 4.11, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty
(30) Trading Days after the date of the initial Subsequent Financing Notice.


 


(f)
The Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction
documents related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be
required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to
any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement,
without the prior written consent of such Purchaser.


 


(g)
Notwithstanding anything to the contrary in this Section 4.11 and unless otherwise agreed to by such Purchaser, the Company
shall either confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been
abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in
such a manner such that such Purchaser will not be in possession of any material, non-public information, by the tenth
(10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th)
Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no
notice regarding the abandonment of such transaction has been received by such Purchaser, such transaction shall be deemed to
have been abandoned and such Purchaser shall not be deemed to be in possession of any material, non-public information with
respect to the Company or any of its Subsidiaries.


 


(h)
Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of (i) an Exempt Issuance, or (ii) a
public offering registered with the SEC.


 


4.12 Subsequent
Equity Sales.


 


(a)
From the date hereof until 30 days after the Closing Date neither the Company nor any Subsidiary shall issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents,
except for Exempt Issuances.


 




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(b)
From the date hereof until the later of (i) such time as the Warrants are no longer outstanding or (ii) such time as the
Notes have been paid in full, the Company will not, without the consent of the Purchasers, enter into any Equity Line of
Credit or similar agreement, nor issue nor agree to issue any common stock, floating or Variable Priced Equity Linked
Instruments nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits,
distributions, dividends, recapitalizations and the like) (collectively, the “Variable Rate Transaction”). For
purposes hereof, “Equity Line of Credit” shall include any transaction involving a written agreement between the
Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor
or underwriter over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity
Linked Instruments” shall include: (A) any debt or equity securities which are convertible into, exercisable or
exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or
exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at
any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange
price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity
security due to a change in the market price of the Company’s Common Stock since date of initial issuance, and (B) any
amortizing convertible security which amortizes prior to its maturity date, where the Company is required or has the
option to (or any investor in such transaction has the option to require the Company to) make such amortization payments in
shares of Common Stock which are valued at a price that is based upon and/or varies with the trading prices of or quotations
for Common Stock at any time after the initial issuance of such debt or equity security (whether or not such payments in
stock are subject to certain equity conditions). For purposes of determining the total consideration for a convertible
instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar discount or
which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be the actual
cash amount received by the Company in consideration of the original issuance of such convertible instrument. Notwithstanding
the foregoing, the Company shall not be prohibited from engaging in any Variable Rate Transaction in connection with any
offering of securities described in clause (e) of the Exempt Issuance definition.


 


(c)
From the date hereof until the earlier of (i) date that is the eighteenth month anniversary of the Closing Date or (ii)
such time as no Purchaser holds any Securities, in the event that the Company issues or sells any Common Stock or Common
Stock Equivalents, if a Purchaser then holding Securities purchased under this Agreement reasonably believes that any of the
terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms and
conditions granted to the Purchasers hereunder, upon notice to the Company by such Purchaser within five Trading Days after
disclosure of such issuance or sale, the Company shall amend the terms of this transaction as to such Purchaser only so as to
give such Purchaser the benefit of such more favorable terms or conditions.


 


(d)
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance and shall only apply as to
price terms in respect of any rights offering. The Company shall provide each Purchaser with notice of any such issuance or
sale in the manner for disclosure of Subsequent Financings set forth in Section 4.11.


 




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4.13 Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the
same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser,
and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 


4.14 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant
to the initial press release as described in Section 4.4. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the
Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality
of the existence and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the
foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws
from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the
initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not
to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release
as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.


 


4.15 Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock
split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in
interest of the outstanding principal balance of the Notes, provided that for avoidance of doubt this Section does not apply
to the Company’s amending its Certificate of Incorporation to increase its authorized shares of Common
Stock.


 




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4.16 Conversion
and Exercise Procedures. The forms of Conversion Notice and Notice of Exercise included in the Notes and Warrants set
forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal
opinion, other information or instructions shall be required of the Purchasers to convert their Notes or exercise their
Warrants. Without limiting the preceding sentences, no ink-original Conversion Notice or Notice of Exercise shall be
required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Conversion Notice or Notice
of Exercise form be required in order to convert the Notes or exercise the Warrants. The Company shall honor conversions of
the Notes and exercises of the Warrants and shall deliver Shares and Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.


 


4.17 DTC
Program. For so long as any Warrants are outstanding, the Company will employ as the transfer agent for the Common Stock
and Warrant Shares a participant in the Depository Trust Company Automated Securities Transfer Program and cause the Common
Stock to be transferable pursuant to such program.


 


4.18 Maintenance
of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its business,
in good working order and condition, ordinary wear and tear excepted.


 


4.19 Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and
franchises in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each
jurisdiction in which such qualification is necessary in view of its business or operations and where the failure to qualify
or remain qualified might reasonably have a Material Adverse Effect upon the financial condition, business or operations of
the Company taken as a whole.


 


4.20 No
Registration of Securities. While the Notes are outstanding, the Company will not file any registration statements, on
Form S-8 or otherwise, to register sales of Common Stock, including shares underlying any derivative securities.


 


4.21 Collateral
Agent. Each Purchaser hereby appoints Cavalry Fund I LP as Collateral Agent under the Security Agreement, and as Agent
under each of the Subsidiary Guaranty and the Pledge Agreement.


 


4.22 Leak
Out. Each Purchaser agrees that, on each Trading Day, it shall not sell, transfer, trade or otherwise dispose of its
Underlying Shares or other shares of Common Stock in an amount exceeding 20% of the Common Stock sold based on the greater of
the preceding or current Trading Day. Notwithstanding the foregoing, (i) each Purchaser shall be entitled to sell $3,500 of
Common Stock per Trading Day and (ii) shall be allowed to sell 20% of the aggregate trading volume for such Trading Day and
the 4 prior consecutive Trading Days so long as on no single day such Purchaser shall be entitled to sell more than 50% of
the trading volume of the Common Stock for such Trading Day.


 




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ARTICLE
V.

MISCELLANEOUS


 


5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if
the Closing has not been consummated on or before September 24, 2018; provided, however, that no such
termination will affect the right of any party to sue for any breach by any other party (or parties).


 


5.2 Fees
and Expenses. Except as expressly set forth below and in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by
such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall
pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the Purchasers. Upon each of the Closing, the Company agrees to
pay counsel for the Purchasers a total of $15,000 in fees together with reasonable costs including those necessary to provide
the Purchasers with a lien on all of the assets of the Company. From its Subscription Amount, the Escrow Agent may withhold a
total of $15,000 in order to pay the fees due its counsel as well as any costs incurred by such counsel provided that written
notice is given to the Company.


 


5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits
and schedules.


 


5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is
delivered via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To
the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the SEC
pursuant to a Current Report on Form 8-K.


 




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5.5 Amendments;
Waivers. Except as provided in the last sentence of this Section 5.5, no provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the
Purchasers who purchased at least a majority in interest of the Amendment based on the initial Subscription Amounts hereunder
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought; provided,
that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers),
the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any
default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any
Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent
of such adversely affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5 shall be
binding upon each Purchaser and holder of Securities and the Company. In order to amend the definition of Exempt Issuance,
the written consent of the Company and each Purchaser must be obtained.


 


5.6 Reserved.


 


5.7 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.


 


5.8 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to
any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”


 


5.9 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8 and this Section 5.9.


 


5.10 Governing
Law; Exclusive Jurisdiction; Attorneys’ Fees. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting
in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an
inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an
Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the
Company elsewhere in this Agreement, the prevailing party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Action or Proceeding.


 




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5.11 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.12 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.


 


5.13 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.


 


5.14 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares
of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares
pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).


 




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5.15 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of
mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction without requiring the posting of any
bond.


 


5.16 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each
of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained
in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such
obligation the defense that a remedy at law would be adequate.


 


5.17 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.


 


5.18 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto including any
action taken by the Collateral Agent as defined by the Security Agreement (whether under this Agreement or the Security
Agreement), shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any
Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the
Purchasers collectively and not between and among the Purchasers.


 




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5.19 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been canceled.


 


5.20 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the
next succeeding Business Day.


 


5.21 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall
be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.


 


5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


5.23 Non-Circumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, including
any Certificates of Designation, or Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement, and will at all times in good faith carry out all of the
provision of this Agreement and take all action as may be required to protect the rights of all holders of the Securities.
Without limiting the generality of the foregoing or any other provision of this Agreement or the other Transaction Documents,
the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of the Note or
exercise of the Warrants above the Note Conversion Price, or Warrant Exercise Price, as applicable, then in effect and (b)
shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully
paid and noassessable Shares upon the conversion of the Note and Warrant Shares upon exercise of the Warrants.
Notwithstanding anything herein to the contrary, if after 180 days from the original issuance date, a holder is not permitted
to convert the Note or exercise the Warrants, in full, for any reason, the Company shall use its best efforts to promptly
remedy such failure, including, without limitation, obtaining such consent or approvals as necessary to permit such
conversion or exercise.


 


(Signature
Pages Follow)


 




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IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


	ONCBIOMUNE
    PHARMACEUTICALS, inc.	 	Address
    for Notice:
	 	 	 
	By:	/s/
    Jonathan F. Head	 	11441
    Industriplex Blvd, Suite 190
	Name:
    	Jonathan
    F. Head	 	Baton
    Rouge, LA 70809
	Title:
    	Chief
    Executive Officer                             	 	Email:
    jhead@oncbiomune.com


 


With
a copy to (which shall not constitute notice):


Sichenzia
Ross Ference LLP


1185
Avenue of the Americas,37th Floor


New
York, NY 10036


Attention:
Thomas Rose


Email:
trose@srfkllp.com


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
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